It is important to know in detail about the Home Loan and its basic information if you are planning to grow your career as a DSA. Moreover, this guide will help you learn and apply the important knowledge needed to succeed in the home loan market. Therefore, let’s explore everything you need to know to become a successful DSA partner and especially excel in selling home loans.
What is a Home Loan?
A home loan is money that banks usually lend to customer to buy, build or fix their house. In other words, it’s a loan where the house will act as security for the bank. Furthermore, borrowers have to repay the loan amount every month through EMIs.
As a DSA, your role is to help people find, compare, and get the best home loan deals. Additionally, you can earn good money by connecting customers with the right banks or financial institutions.
The home loan market in India is growing every year. Consequently, this creates great chances for DSAs to build a profitable business. Thus, understanding the basics will help you serve customers better and increase your earnings.
Types of Home Loans Available in India
Home Purchase Loan
This is the most common type of home loan. Mostly, customers use this loan to buy ready houses or houses that are still being built. Generally, the interest rate for this type of loan ranges from 8% to 10% per year.
Home Construction Loan
Customers who already own land can apply for this home loan to construct their dream home. Meanwhile, the bank gives money in parts based on how much construction is done.
Home Extension Loan
Homeowners choose this option to expand or add rooms to their existing house. Besides, the loan amount depends on the property value and construction cost.
Home Improvement Loan
Customers generally choose this loan to renovate, repair, or upgrade their homes. However, the interest rate is usually higher than regular home loans.
Balance Transfer Loan
In contrast, customers can transfer their existing home loan to another bank offering better rates. As a result, this helps them save money on interest payments.
Land Purchase Loan
On the other hand, some banks provide loans to purchase residential plots. Nevertheless, the interest rate is usually higher than for home purchase loans.
Customer Eligibility Criteria
Before recommending a home loan, check if your customer meets these basic rules. Otherwise, the loan may get rejected.
Age Requirements
The Age criteria for the Home Loan are as follows.
- Minimum age: 21 years when applying for the loan
- Maximum age: 65 years when the loan ends
- In most cases, salaried employees usually get loans until age 60
- On the contrary, self-employed people may get longer terms
Employment Type
Salaried Employees: People working in government offices, private companies, or big companies with stable income can apply easily.
Self-Employed Professionals: Doctors, lawyers, architects, and chartered accountants can get home loans based on their income proof.
Self-Employed Business Owners: People running businesses for at least 3 years can qualify for loans.
Income Criteria
- Check the income eligibility of your customer before recommending a home loan. Also, remember that the income criteria vary depending on the location of your customer and the property.
Key Home Loan Components Explained
Understanding these parts will help you explain loan details clearly to customers. Therefore, let’s look at each one:
| Component | Description | Typical Range |
| Loan Amount | Total money borrowed | ₹5 lakhs to ₹5 crores |
| Interest Rate | Cost of borrowing | 8% to 10.5% per annum |
| Loan Tenure | Repayment period | 5 to 30 years |
| Processing Fee | One-time charge | 0.25% to 1% of the loan amount |
| Prepayment Charges | Fee for early closure | 0% to 4% |
Loan Amount
Generally, banks approve 75% to 90% of the property price. The exact amount depends on income, credit score, and where the property is located. So analyse and explain these criteria to your customers.
Interest Rate
Similarly, two main types of interest rates exist for a home loan:
- Fixed Rate: Stays the same throughout the loan period
- Floating Rate: Changes based on market conditions
Most customers prefer floating rates as they’re usually lower. Help them choose based on what they’re comfortable with.
Loan Tenure
Longer tenure means a smaller monthly payment, but the total interest will be higher. Conversely, a shorter tenure means a bigger monthly payment but less overall cost. Hence, guide customers to select the right balance.
Loan-to-Value Ratio (LTV)
In simple terms, this shows what percentage of property value the bank will finance. For properties worth ₹30 lakhs or less, LTV can be up to 90%. However, for higher values, it’s usually 75% to 80%.
Documents Required for Home Loan Applications
Prepare this simple checklist to help customers submit complete applications. Otherwise, there will be delays.
Identity Proof
First, customers need any one of these:
- Aadhaar Card
- PAN Card
- Passport
- Voter ID Card
Address Proof
Similarly, they need proof of where they live:
- Utility bills (electricity, water, gas)
- Aadhaar Card
- Passport
- Rent agreement
Income Proof for Salaried
Additionally, salaried people need:
- Last 3 months’ salary slips
- Form 16 for the last 2 years
- Bank statements for the last 6 months
Income Proof for Self-Employed
On the other hand, self-employed people need:
- Last 2 years’ income tax returns
- Business proof (registration certificate, GST returns)
- Bank statements for the last 6 months
- Balance sheet and profit & loss statement
Property Documents
Finally, property papers are also needed:
- Sale deed or agreement
- Property tax receipts
- Approved building plan
- NOC from the builder or society
Home Loan Process: Step-by-Step Guide for DSAs
Step 1: Customer Inquiry When a customer contacts you, collect basic information about their requirement. Also, ask about property type, location, and budget.
Step 2: Eligibility Check Next, use online calculators to determine how much home loan they can get. Then, check their credit score and income papers.
Step 3: Lender Selection. Then, compare different banks and recommend the best option. Remember to consider interest rate, processing time, and customer service.
Step 4: Document Collection. Now, help customers gather all required documents. Make sure everything is complete to avoid delays.
Step 5: Application Submission.Once ready, fill the application form carefully. You should submit it online or at the bank branch with all documents.
Step 6: Property Valuation. At this stage, the bank will send someone to assess the property value. It’s important to coordinate this visit smoothly.
Step 7: Legal Verification During this phase, banks conduct legal checks on property documents. You must ensure all papers are clear and genuine.
Step 8: Loan Sanction Once everything is verified, the bank issues a sanction letter. After that, review the terms with your customer.
Step 9: Disbursement. Finally, after the agreement signing, the bank releases the home loan amount. However, for under-construction properties, money is released in parts.
DSA Commission Structure
Your earnings as a DSA depend on the loan amount and bank rules. Here’s what you can expect:
Commission Rates
Most banks pay 0.25% to 0.75% of the approved home loan amount as DSA commission. Some banks offer up to 1% for special customers.
Payment Timeline
Commissions are paid within 30 to 90 days after the home loan is given. Check the payment terms before joining any bank.
Factors Affecting Commission
Several things affect your commission:
- Loan amount: Higher home loans mean better commission
- Customer profile: Good customers may give higher rates
- Your relationship with the bank
- Monthly or quarterly targets you achieve
Example Calculation
If you source a home loan of ₹50 lakhs at 0.5% commission: Your earning = ₹50,00,000 × 0.5% = ₹25,000
Process 10 such cases monthly, and you can earn ₹2.5 lakhs in commissions alone!
Tips to Become a High-Performing Home Loan DSA
Build Strong Networks
First, connect with real estate agents, builders, and property dealers. They can refer potential customers to you.
Provide Excellent Service
Always respond quickly to customer questions. Additionally, guide them throughout the entire process. Happy customers will recommend you to others.
Use Technology
Investing in CRM software to manage leads easily is essential. Along with that, create a professional website to attract online customers.
Specialize
Consider focusing on specific customer types like first-time homebuyers or NRI customers. This specialisation helps you serve better.
Maintain Relationships
Don’t forget to follow up with customers even after the home loan is approved. They may need more loans or refer friends and family.
Set Realistic Expectations
Being honest about loan approval chances is crucial. Never make false promises just to close a deal.
Partner with Multiple Lenders
Lastly, work with 4-5 different banks to offer more choices. This strategy increases your approval rate.
Conclusion
Understanding home loan basics is very important for every DSA looking to succeed in this competitive market. The DSA business offers unlimited earning potential for those who dedicate themselves to doing good work. Join WeRize to sell different loan & investment products and start your earning journey.
Start using these strategies today, and watch your home loan business grow every month. With the right knowledge and approach, you can become a trusted advisor for countless families achieving their dream of owning a home.
FAQ
Q1: How much can I earn as a home loan DSA? Your earnings depend on how many loans you process and their value. Most DSAs earn between ₹50,000 to ₹3 lakhs monthly.
Q2: Do I need certification to become a DSA? While not mandatory, many banks prefer DSAs with NISM certification or proper training.
Q3: How long does home loan approval take? With complete papers, home loans get approved within 7 to 15 working days.
Q4: Can customers with low credit scores get home loans? Yes, but they may face higher interest rates or need a co-applicant with good credit.
Q5: What is the minimum loan amount I can process? Most banks offer home loans starting from ₹5 lakhs. However, this varies by bank.
Q6: How can I increase my commission rate? By meeting targets regularly and bringing high-value home loans, you can ask for better rates from banks.
Q7: Is the DSA business profitable in small cities? Absolutely! Small cities have a growing demand for home loans, and there’s less competition.
Q8: Can I work as a DSA part-time?
Yes! Many successful DSAs start part-time while managing other work.
